The G protein-coupled free fatty acid receptor-1 (FFA1/GPR40) plays a major role in the regulation of insulin secretion by fatty acids. GPR40 is considered a potential therapeutic target to enhance insulin secretion in type 2 diabetes; however, its mode of regulation is essentially unknown. The aims of this study were to test the hypothesis that glucose regulates GPR40 gene expression in pancreatic β-cells and to determine the mechanisms of this regulation. We observed that glucose stimulates GPR40 gene transcription in pancreatic β-cells via increased binding of pancreas-duodenum homeobox-1 (Pdx-1) to the A-box in the HR2 region of the GPR40 promoter. Mutation of the Pdx-1 binding site within the HR2 abolishes glucose activation of GPR40 promoter activity. The stimulation of GPR40 expression and Pdx-1 binding to the HR2 in response to glucose are mimicked by N-acetyl glucosamine, an intermediate of the hexosamine biosynthesis pathway, and involve PI3K-dependent O-GlcNAcylation of Pdx-1 in the nucleus. We demonstrate that OGlcNAc transferase (OGT) interacts with the product of the PI3K reaction, phosphatidylinositol 3,4,5-trisphosphate (PIP 3 ), in the nucleus. This interaction enables OGT to catalyze O-GlcNAcylation of nuclear proteins, including Pdx-1. We conclude that glucose stimulates GPR40 gene expression at the transcriptional level through Pdx-1 binding to the HR2 region and via a signaling cascade that involves an interaction between OGT and PIP 3 at the nuclear membrane. These observations reveal a unique mechanism by which glucose metabolism regulates the function of transcription factors in the nucleus to induce gene expression.T he pancreatic β-cell plays a central role in the control of glucose homeostasis, and β-cell dysfunction is key to the pathogenesis of type 2 diabetes (1). Insulin secretion from the β-cell is tightly regulated by the coordinated action of hormonal, metabolic, and neural factors, ensuring its maintenance within a narrow physiological range. Among these factors, circulating fatty acids do not initiate insulin secretion but strongly potentiate glucose-stimulated insulin secretion (GSIS) (reviewed in ref.2). The G protein-coupled free fatty acid receptor-1 (FFA1/GPR40) is specifically expressed in pancreatic β-cells and activated by medium-to long-chain fatty acids (3-5). GPR40 plays a major role in fatty-acid amplification of GSIS (3, 4, 6-10) and, as such, is being considered as a potential therapeutic target in type 2 diabetes (11-13). Indeed, a recent report from a phase II clinical trial of the first orally available, selective GPR40 agonist, TAK-875 (13), identified the agonist as a highly effective drug for the treatment of type 2 diabetes (14, 15). However, the mode of regulation of GPR40 in pancreatic β-cells remains essentially unknown.We previously characterized the proximal promoter of the GPR40 gene and showed that the 5′-upstream region contains two evolutionary conserved regions, HR2 and HR3, which display DNase I hypersensitivity in β-cells (16). HR3 contains the...